Theoretical and Methodological Implications for the Present Study

It is clearly evident from the foregoing detailed review of empirical literature that the complexity, pervasiveness and universality of the project escalation decision problem cannot be comprehended through speculative reasoning alone, regardless which

150 theoretical lens they are seen through. Empirical validation is needed to establish theoretical legitimacy of the study of the escalation problem but this cannot be demonstrably and unambiguously achieved through the restrictive manipulation of selected variables in an imaginary setting such as a laboratory experiment. A laboratory-based approach is therefore ruled out for the present study. Nevertheless, despite their shortcomings, laboratory experiments have been useful in the continuing search for appropriate theoretical models and the relentless research effort to make sense of a multi-faceted problem despite the perennial lack of access to company data that frustrates researchers. This academic tenacity can be seen as the catalyst for the few studies based on real life companies that have steadily emerged in the shadow of the large number of laboratory-based experiments in the last five decades.

Although few in number, the studies reviewed above have tried in a very limited way to examine single company project (de)-escalation practice and provide, in most cases, some empirical validity to one of the plethora of theoretical propositions that abound in the literature. It is clearly evident from the above analysis that no single study provided a comprehensive framework to guide a serious research project but, when viewed collectively, they formed a body of evidence that pointed to the superiority of the approach-avoidance model, hence the adoption of this model in the present study.

It is worth adding here that one exception is the study of Keil et al. (2000) whose eye-catching title gives the reader the initial impression that it is, unlike its predecessors, an encapsulating multi-theoretical study. Undoubtedly there has been a growing interest in

151 the multi-theory approach, or theoretical triangulation, to remedy the shortcomings of one theory with another theory in the investigation of a research question, and enhance confidence in the ensuing findings and interpretation of results (e.g., Christopher, 2010;

Hoque et al., 2013). However, the desirability of theoretical triangulation is one thing, and properly operationalising it is another and, by their own admission, Keil et al. (2000) have not succeeded in doing so. Some of the many limitations they list have been summarised in Section 4.6 above, namely their cherry-picking of constructs from the four theories they claimed to combine and their total reliance on project auditors as their source of primary data. Even if their questionably selective approach can be passed as mildly multi-theoretical, their use of a single data source that relies on a cross-sectional survey is also questionable. Proponents of theoretical triangulation (e.g., Christopher, 2010; Hoque et al., 2013) clearly advocate the use of (multiple) case studies and preferably methodological triangulation. As the overall aim of the multi-theoretical approach is the in-depth probing of the „how‟ and „why‟ questions particularly for contemporary phenomena within a real-life context, a multiple-case study approach (e.g., Yin, 2003) is more suitable as research data can be treated cumulatively. Alternatively, the adoption of a multi-theoretical approach warrants the use of data triangulation, or pluralism in data sources and data collection techniques (Hoque et al., 2013), to capture multi-level complexities of a phenomenon such as the escalation of commitment in capital project decisions. Therefore, Keil et al.‟s (2000) purported multi-theoretical approach is too flawed and cannot be relied upon for the purposes of the present study.

152 4.8 Summary and Conclusion

This chapter presented a detailed review of the empirical literature on the capital investment decision making process and the escalation/de-escalation problem in order to highlight conceptual and methodological issues to help guide the current study. Most of the existing literature is in the form of often ill-conceived laboratory based on experiments conducted mainly in the USA and UK. Although these experiments have tried to extend the understanding of the problem by „operationalising‟ existing theoretical constructs through simulation, their practical relevance is questionable because the numerous limitations of such experimental determination, e.g. the professional level of subjects who participated in those experiments, the mechanisms of variable manipulation used, and the degree in which the simulated scenarios matched reality.

On the other hand, studies based on real life companies, while more useful than laboratory-based ones, are too few in number and are limited to a small aspect of the problem, therefore far from being able to offer enough evidence to generalize, statistically or analytically, the reported practice. Moreover, they are generally limited in scope given the uniqueness of each case presented, the small number of variables examined and, when an attempt was made to conduct a large scale study; it was done with a largely flawed theoretical triangulation approach. A key conclusion from reviewing empirical studies in relatively sufficient detail is that they are quite disparate in approach and results for them to form a cohesive body of knowledge on a problem of tremendous complexity and practical implications for capital project investment and management.

153 Overall, in addition to extensive review of theoretical perspectives presented in the previous chapter, it has been learnt from the analysis of the (semi)empirical literature in this chapter that a serious study of the escalation of commitment phenomenon needs to be conceptually sound, methodologically robust, and applied to a sufficiently large sample of managers directly involved in capital investment projects and the subsequent (de)-escalation decision. This is no easy task on a sensitive and data deficient research topic but, in the light of the cumulative knowledge gleaned from the extant literature, it is the most promising approach to produce results that are knowledge worthy and practically impactful. To this end, the careful research design of the present study is explained in the next chapter.

154